U.S.

FTC Investigation Targets Mysterious Data Brokers

The Federal Trade Commission is launching an investigation of data brokers that collect your personal information from public and private sources and sell it to ad agencies and other companies, it announced Tuesday.

Consumer privacy issues lie at the heart of the FTC's concerns over data brokers. Nine brokers will be required to hand over detailed information about how they collect your personal data, what they do with it once they have it and whether it's possible for you to correct false data or opt-out of having your data sold by brokers.

The investigation follows an earlier FTC report which found that many consumers remain completely unaware of data brokers' existence, much less what they do or how to interact with them. That study recommended data brokers should become more transparent about who they are and what they do.

"The [earlier study] noted that while data brokers collect, maintain, and sell a wealth of information about consumers, they often do not interact directly with consumers," reads an FTC press release about the investigation. "Rather, they get information from public records and purchase information from other companies. As a result, consumers are often unaware of the existence of data brokers as well as the purposes for which they collect and use consumers’ data."

The FTC was quick to reassure data brokers it isn't casting them as digital villains.

"In many ways, these data flows benefit consumers and the economy," the press release said. "For example, having this information about consumers enables companies to prevent fraud. Data brokers also provide data to enable their customers to better market their products and services."

Two members of Congress are conducting a separate investigation of the data brokerage industry, one of them recently having said the “era of data keepers” has become an “era of data reapers," according to Bloomberg.

Should data brokers be more transparent about what they do and how they do it? Share your thoughts in the comments.

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